Peal Corporation issued 4,000 shares of its $10 par value stock with a market value of$85,000 to acquire 85 percent of the common stock of Seed Company on August 31, 20X3. Seed's fair value was determined to be $100,000 on that date. Peal had previously purchased 15 percent of Seed's common stock for$9,000 on January 31, 20X1, and had carried this investment at fair value on its balance. Peal reported this investment at $15,000 on its balance sheet at August 31, 20X3, immediately prior to acquiring the remaining 85 percent of Seed's shares. On August 31, 20X3, Peal also paid appraisal fees of$3,500 and stock issue costs of $2,000 incurred in completing the acquisition of the additional shares.

Required

Give the journal entries to be recorded by Peal in completing the acquisition of the additional shares of Seed.

An engineer living at an elevation of $2500 \mathrm{ft}$ is conducting experiments to verify predictions of glider performance. To process data, the density of ambient air is needed. The engineer measures temperature $\left(74.3^{\circ} \mathrm{F}\right)$ and atmospheric pressure $(27.3$ inches of mercury). Compute density in units of $\mathrm{kg} / \mathrm{m}^3$. Compare the calculated value with data from the mentioned table and make a recommendation about the effects of elevation on density; that is, are the effects of elevation significant?

Suppose a Brayton engine is run as a refrigerator. In this case, the cycle begins at temperature $T_1$, and the gas is isobarically expanded until it reaches temperature $T_4$. Then the gas is adiabatically compressed, until its temperature is $T_{3^{-}}$. It is then isobarically compressed, and the temperature changes to $T_2$. Finally, it is adiabatically expanded until it returns to temperature $T_1$. a) Sketch this cycle on a $p V$-diagram. b) Show that the coefficient of performance of the engine is given by $K=\left(T_4-T_1\right) /\left(T_3-T_2-T_4+T_1\right)$.

In 2012, the New York Yankees won 95 games and spent $\$ 198$ million on salaries for their players (USA Today). Is there a relationship between salary and team performance in Major League Baseball? For the 2012 season, a linear model fit to the number of Wins (out of 162 regular season games) from the team Salary $(\$ M)$ for the 30 teams in the league is:

$$\widehat{\text { Wins }}=76.45+0.046 \text { Salary. }$$

c) What does the slope mean in this context?

Performance data for a centrifugal fan of 3-ft diameter tested at 750 rpm are $$ \begin{matrix}\text{Volume flow} & \text{106} & \text{141} & \text{176}\\\mathrm{rate, Q (ft^{3}/s)}\\\text{Static pressure} & \text{0.075} & \text{0.073} & \text{0.064}\\\mathrm{rise, \Delta p (psi)}\\\text{Power output,} & \text{2.75} & \text{3.18} & \text{3.50}\\\mathrm{\scr{P} (hp)}\\\text{Volume flow} & \text{211} & \text{246} & \text{282}\\\mathrm{rate, Q (ft^{3}/s)}\\\text{Static pressure} & \text{0.050} & \text{0.033} & \text{0.016}\\\mathrm{rise, \Delta p (psi)}\\\text{Power output,} & \text{3.51} & \text{3.50} & \text{3.22}\\\mathrm{\scr{P} (hp)}\\\end{matrix} $$ Plot the performance data versus volume flow rate. Calculate static efficiency, and show the curve on the plot. Find the best efficiency point, and specify the fan rating at this point.

True or false: (a) Work can never be converted completely into heat. (b) Heat can never be converted completely into work. (c) All heat engines have the same efficiency. (d) It is impossible to transfer a given quantity of heat from a cold reservoir to a hot reservoir. (e) The coefficient of performance of a refrigerator cannot be greater than 1. (j) All Carnot engines are reversible. (g) The entropy of a system can never decrease. (h) The entropy of the universe can never decrease.

The adjusted trial balance of Estella Real Estate Appraisal at June 30, 2016, follows:

$$\begin{array}{c} \textbf{ESTELLA REAL ESTATE APPRAISAL}\\ \text{Adjusted Trial Balance}\\ \text{June 30, 2016}\\ \end{array}$$

$$\begin{array}{lrr} &\textbf{Balance}\\ \textbf{Account Title}&\textbf{Debit}&\textbf{Credit}\\ \text{Cash}&\$4,600\\ \text{Accounts Receivable}&5,300\\ \text{Office Supplies}&1,500\\ \text{Prepaid Insurance}&1,600\\ \text{Building}&77,000\\ \text{Accumulated Depreciation - Building}&&\$26,000\\ \text{Land}&13,500\\ \text{Accounts Payable}&&19,300\\ \text{Interest Payable}&&8,400\\ \text{Salaries Payable}&&1,900\\ \text{Unearned Revenue}&&5,300\\ \text{Notes Payable (long-term)}&&37,000\\ \text{Common Stock}&&3,000\\ \text{Retained Earnings}&&37,000\\ \text{Dividends}&27,200\\ \text{Service Revenue}&&48,900\\ \text{Insurance Expense}&4,300\\ \text{Salaries Expense}&33,000\\ \text{Supplies Expense}&200\\ \text{Interest Expense}&8,400\\ \text{Utilities Expense}&2,500\\ \text{Depreciation Expense - Building}&7,700\\ \text{Total}&\underline{\underline{\$186,800}}&\underline{\underline{\$186,800}}\\ \end{array}$$

Requirements

1. Prepare the company's income statement for the year ended June 30, 2016.
2. Prepare the company's statement of retained earnings for the year ended June 30, 2016.
3. Prepare the company's classified balance sheet in report form at June 30, 2016.
4. Journalize the closing entries.
5. Open the T-accounts using the balances from the adjusted trial balance, and post the closing entries to the T-accounts.
6. Prepare the company's post-closing trial balance at June 30, 2016.

Performance data for a centrifugal fan of 3-ft diameter, tested at 750 rpm, are

$$\begin{matrix} \text{Volume flow rate Q (}{\mathrm{ft}^{3} /s)} & \text{106} & \text{141} & \text{176} & \text{211} & \text{246} & \text{282}\\ \text{Static pressure rise, }{\Delta p} (psi) & \text{0.075} & \text{0.073} & \text{0.064} & \text{0.050} & \text{0.033} & \text{0.016}\\ \text{Power output }{\mathscr{P} (hp)} & \text{2.75} & \text{3.18} & \text{3.50} & \text{3.51} & \text{3.50} & \text{3.22}\\ \end{matrix}$$

Plot the performance data versus volume flow rate. Calculate static efficiency, and show the curve on the plot. Find the best efficiency point, and specify the fan rating at this point. Using the fan, determine the minimum size square sheet-metal duct that will carry a flow of 200 $\mathrm{ft}^{3}$/s over a distance of 50 ft. Estimate the increase in delivery if the fan speed is increased to 1000 rpm.

Cell Design produces cell phone covers for all makes and models of cell phones. Cell Design sells 1,050,000 units each year at a price of $10 per unit and a contribution margin of 40%.

A survey of Cell Design customers over the past 12 months indicates that customers were very satisfied with the products but a disturbing number of customers were disappointed because the products they purchased did not fit their phones. They then had to hassle with returns and replacements.

Cell Design’s managers want to modify their production processes to develop products that more closely match Cell Design’s specifications because the quality control in place to prevent ill-fitting products from reaching customers is not working very well.

The current costs of quality are as follows:

$$\begin{array}{lr} \text{Prevention costs}& \$210,000\\ \text{Appraisal costs}& \$100,000\\ \text{Internal failure costs}&\\ \quad\text{Rework}& \$420,000\\ \quad\text{Scrap}& \$ 21,000\\ \text{External failure costs}&\\ \quad\text{Product replacements}& \$315,000\\ \quad\text{Lost sales from customer returns}& \$787,500\\ \text{The QC manager and controller have forecast the following}& \\ \quad\text{additional costs to modify the production process.}&\\ \text{CAD design improvement}& \$150,000\\ \text{Improve machine calibration to specifications}& \$137,500\\ \end{array}$$

1. Which cost of quality category are managers focusing on? Why?

2. If the improvements result in a 60% decrease in customer replacement cost and a 70% decrease in customer returns, what is the impact on the overall COQ and the company’s operating income? What should Cell Design do? Explain.

3. Calculate prevention, appraisal, internal failure, and external failure costs as a percentage of total quality costs and as a percentage of sales before and after the change in the production process. Comment briefly on your results.

Match the plot with the description of the sample.

$$\begin{array}{l|l} 6 & 78 \\ 7 & 455888 \\ 8 & 1355889 \\ 9 & 00024 \end{array}$$

Key: $6 \mid 7=67$

a) Time (in minutes) it takes a sample of employees to drive to work

b) Grade point averages of a sample of students with finance majors

c) Top speeds (in miles per hour) of a sample of high-performance sports cars

d) Ages (in years) of a sample of residents of a retirement home

For the cycle of Problem, investigate the effects on cycle performance as the higher extraction pressure takes on other values. The operating conditions for the open feedwater heater are unchanged from those in earlier problem. Assume that condensate drains from the closed feedwater heater as saturated liquid at the higher extraction pressure. Also feedwater leaves the heater at $12\ \mathrm{MPa}$ and a temperature equal to the saturation temperature at the extraction pressure. Construct suitable plots and discuss.

(a) Give two original examples of time series data.

(b) Give two original examples of crosssectional data. In each case, identify the unit of observation carefully. If the data are both crosssectional and time series, explain why. Hint: Do not restrict yourself to published data, and consider data describing your own life (e.g., sports performance or financial data). You need not list any data, merely describe them and perhaps show a few typical data values.

Sailmaster makes high-performance sails for competitive windsurfers. The following is information about the inputs and outputs for one model, the Windy $2000$ . Calculate the productivity in sales revenue/labor expense.

$$\begin{array}{ll} \hline\text { Units sold } & 1,217 \\ \text { Sale price each } & \$ 1,700 \\ \text { Total labor hours } & 46,672 \\ \text { Wage rate } & \$ 12 / \text { hour } \\ \text { Total materials } & \$ 60,000 \\ \text { Total energy } & \$ 4,000 \\ \hline \end{array}$$

The Red Lobster Restaurant chain conducts regular surveys of its customers to monitor the performance of individual restaurants. One of the questions asks customers to rate the overall quality of their last visit. The listed responses are Poor (1), Fair (2), Good (3), Very good (4), and Excellent (5). The survey also asks respondents whether their children accompanied them (1 5 yes and 2 5 no) to the restaurant. Graphically depict these data and describe your findings.